Per Woofun AI, Wintermute’s latest weekly report indicates that the recent rebound in risk assets stems from two primary catalysts: US May CPI data meeting expectations and the resolution of the Iran conflict. Although headline CPI rose 4.2% year-on-year, core CPI fell to 2.9%, suggesting energy-driven inflation pressures are peaking rather than spreading to wages or services.

Concurrently, the end of the over 100-day Iran conflict and the lifting of the Strait of Hormuz blockade have rapidly dissipated geopolitical risk premiums.

This shift drove Brent crude prices down from approximately $110 to the $80 range, a 6.6% weekly decline, while also pulling down the US dollar index and bond yields.

Cross-asset performance reflects a clear return of risk-on sentiment, with the Russell 2000 Index rising 4.0% and altcoin market capitalization increasing 3.1%.

However, Wintermute emphasizes that the current focus is shifting to the upcoming Federal Reserve meeting, where Chair Powell’s press conference and the dot plot will be critical. Regarding digital assets, the firm argues that the recent recovery represents sentiment repair rather than a new uptrend. Bitcoin’s prior 14% weekly drop was driven by macro factors rather than Strategy’s sales, and Ethereum continues to underperform. Crucially, stablecoin net inflows, spot ETF flows, and digital asset treasury sizes show no significant improvement, indicating that confirming a market bottom remains premature until institutional capital re-enters.